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A pareto optimum congestion reduction scheme

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  • Daganzo, Carlos F.
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    Abstract

    This article shows that certain congestion reduction schemes have the potential for not penalizing anyone. The traditional social welfare approach is modified to address the distribution of gains and losses across the population. As a first step in this line of research, we consider a transportation system where congestion delay is simply given by a function of its user flow. We show that a particular pricing scheme with variable tolls, that can be viewed as hybrid between rationing and pricing, can benefit everyone (unlike pure pricing alone) even if the collected revenues are not returned to the population. The simple conditions under which this is possible are identified. Few data are needed to choose a beneficial policy. Examples are given.

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    Bibliographic Info

    Article provided by Elsevier in its journal Transportation Research Part B: Methodological.

    Volume (Year): 29 (1995)
    Issue (Month): 2 (April)
    Pages: 139-154

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    Handle: RePEc:eee:transb:v:29:y:1995:i:2:p:139-154

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    Cited by:
    1. Nakamura, Katsuhiko & Kockelman, Kara Maria, 2002. "Congestion pricing and roadspace rationing: an application to the San Francisco Bay Bridge corridor," Transportation Research Part A: Policy and Practice, Elsevier, vol. 36(5), pages 403-417, June.
    2. Lei Zhang & David Levinson, 2004. "Pricing, Investment, and Network Equilibrium," Working Papers 000032, University of Minnesota: Nexus Research Group.
    3. Yang, Hai & Wang, Xiaolei, 2011. "Managing network mobility with tradable credits," Transportation Research Part B: Methodological, Elsevier, vol. 45(3), pages 580-594, March.
    4. Bulteau, Julie, 2012. "Tradable emission permit system for urban motorists: The neo-classical standard model revisited," Research in Transportation Economics, Elsevier, vol. 36(1), pages 101-109.
    5. Kockelman, Kara M. & Kalmanje, Sukumar, 2005. "Credit-based congestion pricing: a policy proposal and the public's response," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(7-9), pages 671-690.
    6. Jan Rouwendal & Erik T. Verhoef & Jasper Knockaert, 2010. "Give or take? Rewards vs. Charges for a Congested Bottleneck," Tinbergen Institute Discussion Papers 10-062/3, Tinbergen Institute.
    7. Guo, Xiaolei & Yang, Hai, 2010. "Pareto-improving congestion pricing and revenue refunding with multiple user classes," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 972-982, September.
    8. Sathaye, Nakul & Harley, Robert & Madanat, Samer, 2010. "Unintended environmental impacts of nighttime freight logistics activities," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(8), pages 642-659, October.
    9. Rouwendal, Jan & Verhoef, Erik T. & Knockaert, Jasper, 2012. "Give or take? Rewards versus charges for a congested bottleneck," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 166-176.
    10. C. Robin Lindsey & Erik T. Verhoef, 2000. "Traffic Congestion and Congestion Pricing," Tinbergen Institute Discussion Papers 00-101/3, Tinbergen Institute.
    11. Zhu, Shanjiang & Du, Longyuan & Zhang, Lei, 2013. "Rationing and pricing strategies for congestion mitigation: Behavioral theory, econometric model, and application in Beijing," Transportation Research Part B: Methodological, Elsevier, vol. 57(C), pages 210-224.
    12. Kockelman, Kara M. & Lemp, Jason D., 2011. "Anticipating new-highway impacts: Opportunities for welfare analysis and credit-based congestion pricing," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(8), pages 825-838, October.
    13. C. Robin Lindsey & Erik T. Verhoef, 2000. "Traffic Congestion and Congestion Pricing," Tinbergen Institute Discussion Papers 00-101/3, Tinbergen Institute.
    14. Carlos Carrion & David Levinson, 2010. "Value of Travel Time Reliability: A review of current evidence," Working Papers 000085, University of Minnesota: Nexus Research Group.
    15. Wu, Di & Yin, Yafeng & Lawphongpanich, Siriphong, 2011. "Pareto-improving congestion pricing on multimodal transportation networks," European Journal of Operational Research, Elsevier, vol. 210(3), pages 660-669, May.
    16. Nie, Yu (Marco) & Yin, Yafeng, 2013. "Managing rush hour travel choices with tradable credit scheme," Transportation Research Part B: Methodological, Elsevier, vol. 50(C), pages 1-19.

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